Plaintiffs seek damages and aim to force Facebook to sell WhatsApp and Instagram, and seek to end Mark Zuckerberg’s control of firm
Facebook has been hit with a lawsuit filed in a US federal court in San Francisco on Thursday for alleged anti competitive conduct.
The lawsuit, from four companies, is seeking major changes at the social networking giant, including forcing it to offload its WhatsApp and Instagram services, as well as forcing CEO Mark Zuckerberg to give up control of the company he co-founded.
The plaintiffs are described as four potential competitors to Facebook in the app development sector.
According to Bloomberg, the companies suing Facebook are Reveal Chat HoldCo LLC (a successor to the dating site LikeBright); USA Technology and Management Services Inc (also known as financial service provider Lenddol); former peer-to-peer site Cir.cl Inc; and former identity verification provider Beehive Biometric Inc.
The companies reportedly said if Facebook isn’t forced to sell its WhatsApp and Instagram assets, it’ll integrate them into the social network, “consolidating its market power across the globe, likely permanently foreclosing competition in the relevant markets for decades to come.”
The companies describe Facebook as “one of the largest unlawful monopolies ever seen in the United States” and say the aim of the lawsuit is “to halt the most brazen, willful anti competitive scheme in a generation.”
The plaintiffs are seeking class-action status and unspecified damages, according to a filing at the US District Court for the Northern District of California.
“Facebook faced an existential threat from mobile apps, and while it could have responded by competing on the merits, it instead chose to use its might to intentionally eliminate its competition,” Yavar Bathaee, a partner at law firm Pierce Bainbridge and co-lead counsel in the case, was quoted by Reuters as saying.
Reuters reported that the filing is an escalation of Facebook’s battles with small app developers that had built companies based on access to its user data.
Facebook cut off access for certain apps as far back as 2012, while still allowing access for others, Reuters said.
But Facebook has dismissed the lawsuit claims as being “without merit”.
“We operate in a competitive environment where people and advertisers have many choices,” Facebook said in an emailed statement to Bloomberg. “In the current environment, where plaintiffs’ attorneys see financial opportunities, claims like this aren’t unexpected but they are without merit.”
It should noted that Facebook, and other tech firms including Amazon, Apple, and Google are facing an investigation by regulators at the Department of Justice and the FTC, who are said to be focusing on ‘anti-competitive conduct’ at the firms.